Investigative reporter

Ombudsman George Brouwer's report on the botched rezoning of farmland at Ventnor on Phillip Island is a sad indictment on this state's integrity system under the Baillieu/Napthine government.

It is the murkiest planning saga in this state for many years and has cost Victorian taxpayers millions of dollars. Yet not one branch of this state's expensive, heavily staffed, but increasingly toothless integrity system has properly investigated it.

Ventnor was an ideal candidate for the kind of broad-based anti-corruption regime that Ted Baillieu promised while in opposition. Liberal policy ahead of the 2010 election defined corruption as including decisions "not made in the public interest" and decisions "made to serve private interest". It might have been written specifically to describe Ventnor.

As Fairfax Media revealed in 2012, Planning Minister Matthew Guy's initial decision to rezone followed approaches to his office on behalf of property purchasers Carley Nicholls and husband Jim Hopkins (the latter a Liberal Party member at the time) by family friend, former Kennett government planning minister and nearby resident Rob Maclellan.

Then after a storm of protest from another camp within the Liberal Party, including then-premier Ted Baillieu, Mr Guy backflipped.

This messy saga led to threats by Ms Nicholls that she would "reveal all", in a potentially explosive Supreme Court case, a threat averted by a confidential, silencing compensation payout.

The Ombudsman's report has failed to address two key questions that hang over this matter: Why was Planning Minister Mathew Guy's office so determined to back housing development at Ventnor against the original advice of his own department and its lawyers, the local Bass Coast shire, and two independent planning panels? Second, why - if the minister's backflip was lawful - were Victorian taxpayers called on to pay millions of dollars in compensation to aggrieved parties?

Victoria's integrity system has failed to give taxpayers an explanation, much less held those responsible to account.

In part the problem is with the system itself, a stark contrast to the NSW ICAC - which Mr Baillieu promised to use as his model - the system that has exposed so much about the NSW Labor, and now threatens to snare Liberal heavyweight Arthur Sinodinos.

ICAC is free to investigate just about anything it wants to, even follow a hunch or a suspicion.

By contrast Victoria's definition of "corrupt conduct" is so prohibitively narrow that it must be "serious" enough to constitute an indictable offence. Nor can an investigation be triggered unless IBAC is satisfied by facts presented that serious corruption may have occurred.

The Victorian model is further weakened by the fact that politicians have been deemed "unique" and escape IBAC scrutiny.

IBAC has refused to look at the kind of cases that are routine for its northern counterpart. Last year it dismissed Mr Brouwer's call for Mr Guy to be investigated over secret fund-raising meetings with property developers, revealed by Fairfax Media.

So, working from the assumption that IBAC would dismiss his concerns about Ventnor, Labor's spokesman on planning Brian Tee lodged a complaint to the next major arm of the Victorian integrity system - the office of the Ombudsman Victoria.

However, under the Victorian regime, the Ombudsman's jurisdiction is also unable to investigate MPs or corruption, unless asked to by IBAC.

It is restricted to probing the administrative actions of public servants. And its coercive powers are limited. In the Ventnor matter Mr Guy refused to hand over documents requested by the Ombudsman. Mr Brouwer was unable to compel the minister to do so. The Ombudsman also specifically notes in his report that, due to the limits of his jurisdiction, he could not fully investigate key issues around the minister's decision-making.

Still, the Ombudsman does not have to remain within the terms of reference of an inquiry once it is under way. His office is entitled – and has been willing in the past – to cast its net beyond the public service if such widening of its probe assists its understanding of a matter.

For reasons not yet fully clear, the Ombudsman chose not to throw the net wider in this case.

It is unfortunate timing that the Ventnor report landed just days before George Brouwer's retirement. After 10 years in that job he deserves a better send-off.